1.2 Who Must Be Licensed: Residential Builder vs. M&A Roofing & the Exemptions

The Two License Types

MCL 339.2401 defines the regulated occupations.

A residential builder undertakes, or offers to undertake, the construction, replacement, repair, alteration, addition, improvement, wrecking, or demolition of a residential structure for a fixed sum, fee, percentage, or other compensation other than wages for personal labor. Manufacturers and distributors of prefabricated or shell housing are included. So is a person who erects a residential structure for anyone other than their own use on their own property.

A residential maintenance and alteration contractor undertakes, for compensation other than wages, the repair, alteration, addition to, subtraction from, improvement, wrecking, or demolition of a residential structure. The definition also covers building a garage, laying concrete on residential property, and buying, substantially rehabilitating, and reselling the same residential property more than twice in one calendar year, with limited exceptions.

A residential structure is a detached one- or two-family dwelling with its related facilities, or a townhouse of not more than 3 stories above grade with a separate means of egress. Purely commercial roofing is not regulated by Article 24. For commercial work, check local licensing and the Michigan Building Code instead.

The M&A Trades

MCL 339.2404(3) lists the crafts and trades an M&A license may include: carpentry; concrete; swimming pool installation; basement waterproofing; excavation; insulation work; masonry work; roofing; siding and gutters; screen or storm sash installation; tile and marble work; and house wrecking. LARA's M&A information page lists siding and gutters as separate trades. The license must specify each trade for which the licensee qualified.

The Incidental Work Rule

A specialty contractor is not limited to a single trade. MCL 339.2404(3) says the licensee may take and perform a contract that includes other trades if the work in the other trade is incidental and supplemental to the licensed trade. For example, a licensed roofer can replace rotted sheathing and fascia boards, or reinstall gutter hangers removed during a tear-off, because that work supports the roofing job. A roofer who takes a separate contract to re-side the whole house or build a deck is working outside the license.

The Exemptions in MCL 339.2403

The following persons may perform residential building or M&A work without an Article 24 license:

1. An authorized representative of the United States, the state, or a local government.
2. A property owner working on a structure for the owner's own use and occupancy.
3. An owner of rental property, for maintenance and alteration of that rental property.
4. An officer of a court acting within the scope of that office.
5. A person, other than a salesperson, who works solely under contract with a licensed residential builder or M&A contractor.
6. A person working on one undertaking or project, under one or more contracts, whose aggregate contract price for labor, material, and other items is less than $600.
7. A licensed electrical, plumbing, or mechanical contractor under the Skilled Trades Regulation Act, but only for that contractor's own trade work.

The $600 exemption has two anti-evasion limits. It does not apply when the work is only part of a larger operation, and it does not apply when a job is divided into contracts under $600 to evade the act. LARA's homeowner guidance puts it simply: contractors offering work of $600 or more in labor and materials must be licensed.

Subcontracting Under a Licensed Contractor

Exemption 5 explains why an unlicensed crew can legally install shingles for a licensed builder. The crew contracts with the licensee, not the homeowner. However, the crew may not sell to or contract with homeowners directly. The licensee is also exposed. Under MCL 339.2411(2)(j), a licensee may not aid or abet an unlicensed person to evade the article or let an unlicensed person use its license.

When a License Stops Counting

Under MCL 339.601(3), a person whose license is suspended, revoked, or lapsed is treated as unlicensed. Missing a renewal therefore turns ongoing work into unlicensed practice, with the penalties covered in Section 1.6. MCL 339.2410 adds that a current licensee does not repeat the exam to obtain an additional license, but an M&A contractor who applies for a Residential Builder license must take the builder exam.

Exam Traps

• A trap answer may say roofing is "routine maintenance" and exempt. It is not. Roofing is a listed M&A trade, and the $600 threshold applies to the total project.
• Splitting a $1,500 tear-off into three $500 invoices does not create an exemption.
• A homeowner may roof their own home without a license, but not a house they are building to sell. Selling it means the structure was not built for their own use.
• A licensed electrician installing a roof-mounted PV disconnect needs no builder license for the electrical work. The same electrician may not contract to replace the shingles.